EURUSD Guns for Higher Prices After Rebounding off Its Falling Wedge Pattern

Market Analysis – Price rebounds off its falling wedge pattern and guns for higher prices.

EURUSD guns for higher prices after it falls back to retest the upper border of the falling wedge pattern. The bulls have now used the falling wedge chart pattern properly to their advantage to cause a market reversal in the upward direction after price shoots up. The market rebound is aided by the confluence of the upper border of the falling wedge with the 1.17560 critical support.

EURUSD Significant Zones

Resistance Levels: 1.18400, 1.19100, 1.21460
Support Levels: 1.16550, 1.17100, 1.17560
The market initially began a decline from the 1.21460 resistance level on the 16th of June 2021. The market after that fell 2.50% in three days to the 1.18400 support, which acted as a starting point for the creation of the falling wedge pattern. Price began tapering down the falling wedge pattern, and this lasted for 25 trading days. Eventually, on the 27th of July 2021, the EURUSD broke out of the wedge formation and it guns as high as 1.19100.

At this point, bulls became weakened, which led to a downturn in the market. The euro then came crashing back towards the wedge. Fortunately, the 1.17560 support has come in confluence with the upper border of the falling wedge. This confluence rebounds the EURUSD and it guns upwards. The EFI (Elders Force Index) has its force line moving upward to the zero level. This action shows a steady shift of power from bears in the retracement to bulls in the rebound.

Market Prospects

The market has bounced off 1.17100 and is on the rise. As in the daily chart, the MA period 9 (Moving Average) has gone below the 4-hour candlesticks. However, the euro is currently experiencing a second retracement since rebounding from the confluence. Price has touched down at the 50% Fibonacci ratio, and the next 4-hour candle now has a higher low, which means the euro may already have started recovering from its retracement. The EFI power line remains above the zero level despite the current retracement. This activity means a considerable number of buyers are working behind the scenes to uphold the market.

Upon full recovery from the retracement, we should see price reach as high as 1.19100.

Note: Forexschoolonline.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.